I have been looking at a few sites that sell ClassIII and law enforcemnt and military weapons and a new full auto MP5, AK47 full auto or a Colt M4 full auto are selling from $12,000.00 to $25,000.00 !!! These guns sell for $3000 new? Whats the deal?

"The Firearms Owners' Protection Act of 1986 outlawed the manufacture of submachine guns for the civilian market and currently limits legal ownership to units produced and properly registered with the BATFE before May 1986."

From Wikipedia... only those machine guns in existence and registered with the ATF can be sold to civilians. There is a limited supply, thus the high prices.

LE, military and government can buy new MG's, but not so much for civilians.

Even prior to the 1986 freeze, the price on (private citizen owned) FA guns was always in a climb, due to the fact that $200 was paid as tax each time the gun was sold. And back then, $200 was still real money.

An FA gun with a selling price of $500, transferred through 5 owners over a few years earns the Fed $1000 in taxes. And owner #6 has to pay at least $1,500 to #5 and $200 to the Fed.

With the closing of the civilian registry in 1986, that steady climb skyrocketed. The intended result is, obviously, to eventually end legal private ownership of full auto firearms, as with the supply fixed, by law, eventually they will wear out, or become so valuable as to never be fired.

The law has created 3 price levels for full auto guns. Take a classic example, the Tommygun (1921 or 1928 model with all the trimmings, for example), 3 guns, identical, except for their legal status.
Gun#1) legal to sell only to the police or military, worth only a few hundred dollars, because the police & military don't want Tommyguns much anymore.

Gun#2) never registered, and cannot be legally registered today. Worth 10 years in jail, a $10K(+) fine, Fed. felony conviction ( and all that goes with it) to any one caught with it.

Gun #3) legally registered and can be transferred to civilian ownership. Gun is worth what the market will bear, as there are only a few, and no more can be made. $20-40,000 and up. Kind of like rare old wines and paintings, the only way to get one is to find one somebody is willing to sell, and pay whatever they ask for it.

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All else being equal (and it almost never is) bigger bullets tend to work better.

There are actually three levels of transferable machineguns on the market:

1) post 86 dealer samples which can be owned by a III dealer only and require a poice department letter requesting demonstration in order for a III dealer to take possession of one. Said III dealer must surrender the post sample if he ever gives up his license.
2) pre 86 dealer samples which can only be possessed by a III dealer, however, the dealer can keep it in his personal collection if he surrenders his license.
3) fully transferable which would include machineguns manufactured and registered properly before 1986, Amnesty guns and C&R guns which top the list.

Fully transferable IIIs are a good investment if one is so inclined. For example, in 1994 I paid $6000 for a C&R MG42, one just like it sold on gunbroker for $24M this past September.....a decent return on an investment that you could shoot. Let your conscience be your guide regarding capital gains. I unforunately sold it to build a house soon thereafter

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